S&P 500 ends at a record as Fed optimism lingers

The S&P 500 ended at another record high today, extending gains for a fifth day on investors' optimism that the Federal Reserve will keep interest rates low for a long period of time.

The S&P 500's gain was slim, however, with the benchmark index recovering late in the session from earlier losses. Retailers, including Coach, weighed on the index.

The Dow also eked out a gain, while the Nasdaq slipped a day after the Fed lowered its forecast for target US interest rates in the long term

Energy shares ranked among the biggest gainers. Oil prices ended higher after President Barack Obama said he was sending up to 300 US military advisers to Iraq as the Iraqi government's troops fought Sunni rebels for control of the country's biggest refinery. Shares of Chevron Corp added 1.3 percent to $131.99..

The Dow Jones industrial average rose 14.84 points or 0.09 percent, to end at 16,921.46. The S&P 500 gained 2.50 points or 0.13 percent, to close at 1,959.48. The Nasdaq Composite fell 3.51 points or 0.08 percent, to 4,359.33.

The advance marked the S&P 500's second record close in a row.

Factory activity in the US Mid-Atlantic region grew at a faster pace than expected in June. The Philadelphia Federal Reserve Bank said its business activity index shot up to 17.8 from 15.4 in May, above the forecast for a reading of 14.

European shares rose in early deals boosted after the Federal Reserve said the US economy was making progress and committed to retaining accommodative monetary policy over the long term.

The pan-European FTSEurofirst 300 rose 0.7 percent, tracking gains overnight on Wall Street and in Asia that saw the S&P 500 hit a new record high.

The Euro STOXX Volatility index, which measures how much investors have to pay to protect gains through options and is a crude indicator of investor fear, fell to its lowest since December 2006.

The gains were made after the Fed hinted at a slightly faster pace of interest-rate increases starting next year but suggested rates in the long run would be lower than it had indicated previously.

Expectations had been building that the Fed would take a more hawkish view in order to tackle inflation that was higher than anticipated.

The rise left the FTSEurofirst 300 just 0.1 percent off of its 2014 high set earlier this month, which was the index's highest level since January 2008.

The index has been rangebound in recent weeks as violence in Iraq has pushed up the price of oil, lifting shares of major oil companies but raising input costs for other companies, as well as squeezing consumer spending.

Brent crude held near a nine-month high above $114 a barrel on Thursday, poised for a third day of gains following a rise of more than 4 percent last week on supply concerns after Islamic militants seized much of northern Iraq.

Meanwhile, Japan's Nikkei share average jumped 1.6 percent to a 4-1/2-month high after the Federal Reserve expressed confidence on the US economy and committed to its dovish monetary policy, which spurred buying from foreign investors.

The Nikkei rose 245.36 points to 15,361.16, its highest close since Jan. 29. The broader Topix soared 1.6 percent to 1,269.04 in active trade, with 2.78 billion shares changing hands - the highest since May 30.